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Environmental & Resource Economics (ERE)

LEEP paper published in the Environmental & Resource Economics journal

Congratulations to the LEEP Institute's Dr Greg Smith, Professor Brett Day and Dr Amy Binner, whose paper has been published in the prestigious Environmental & Resource Economics journal.

The paper entitled  'Multipleā€Purchaser Payments for Ecosystem Services: An Exploration Using Spatial Simulation Modelling' can be found in full here.

Abstract
This paper focuses on the issue of payments for ecosystem services (PES) mechanism design when the activity incentivised through the scheme benefits multiple groups, each of whom might be prepared to contribute to payments made through the scheme. In par- ticular, we examine spatial coordination on the demand side of the market; that is to say, the question of which beneficiary of the PES scheme buys land-management changes on which land parcels. We show through spatial simulation modelling that it is possible for negotiation to lead to Pareto improvements when compared to solutions reached through non-cooperative strategic solutions; however, we also show that this result is not universal and only holds under certain conditions. In particular, the spatial correlation and spatial interdependence of the ecosystem service benefits are key in determining whether nego- tiation between beneficiaries is optimal and therefore if policy makers and designers of PES schemes should be prioritising bringing together multiple beneficiaries of ecosystem services.

Date: 6 March 2019